Executive summary
Eden Land will be a limited liability firm that intends to produce healthy flavored water combined with fruits slices at a lower price and serve it to customers in a uniquely designed type of bottles. The firm will endeavor to produce Eden a healthy drink, which is one of the most quality pure water in the market. Eden drink is flavored water combined with slices of fruits and having minimum quantities of sodium to increase the vitamin content, which is considered suitable for health. The target market for Eden drink will be people with water retention problems and high blood pressure.
Eden Land will be located in Abu Dhabi and requires over 5 million AED as start-up capital comprising of total assets and expenses. In addition, the final product of the flavored water will be processed, served, packed and sold in Abu Dhabi in UAE. Moreover, the product quality will continue to attract the increasing demand for pure healthy drink. In addition, the product quality will increase the firm’s competitive advantage as well as its market share. The increased market share will result in increased revenue that benefits both the firm and the shareholders. The increased revenue benefits to the shareholders make the firm an ideal for investments. Besides, the store will majorly depend on the vast experience and technical skills of its top management.
Business description
Overview of the business operations
As indicated, Eden Land is a firm that intends to produce healthy flavored water with fruits at a lower price and serve it to customers in a uniquely designed type of bottles. The final product of the flavored water will be processed, served, packed and sold in Abu Dhabi in UAE. In addition, Eden Land will take advantage of increased demand for pure healthy drink to establish and increase its share in the UAE market.
Objectives of the firm
Satisfying the needs of customers with a pure healthy drink served in developed eco-friendly bottles or cups is the main objective of the firm. Customers’ tastes differ in many ways, and the firm understands that creativity is one of the ways it can use to influence the purchase of its products. Another objective is to be the leader in the provision of pure healthy drink by the end of 2016 using a brand name that is recognized for environmental friendly products. Being environmental friendly will ensure long-term sustainability of the firm since there are many concerns today regarding the environment.
Mission statement
The mission of Eden Land is to attract and maintain customers through the provision of convenience and high quality products that surpass the anticipation of the clients.
Business location
Eden Land store will be located in cornice – Abu Dhabi because of nearness to the market. Most of the people who are aware of their health are exercising there and they need the Eden pure and healthy drink. The location will be idyllic and perfect since it will provide easy access to the customers.
Form of business ownership
The business will be a limited liability company.
The product description (Eden as a healthy pure drink)
Eden Land is committed to provision of products that offer excellent quality to the target customers. In addition, the firm will focus on the needs of customers. As such, the firm will endeavor to produce Eden pure and healthy drink, which is one of the most quality pre water drinks in the market. Eden drink is healthy and pure flavored water combined with slices of fruits and having minimum quantities of sodium to increase the mineral and vitamin content, which is considered suitable for health. The low sodium and increased vitamin content enables Eden drink to be the best choice for people suffering from high blood pressure and water retention.
In addition, Eden pure water and healthy drink will be served in unique eco friendly bottles that differentiate it from other pure water drinks offered by competitors. The eco friendly bottles will enable the product be easily identified by the potential customers in the market. Further, Eden land will also ensure that Eden healthy drink stands out consistently within the market by ensuring that the product is treated according to the required specifications. Eden land will provide the target customers with a high quality healthy drink that influences purchase and maximize sales, profits, and revenues.
Moreover, Eden healthy drink will be one of the new flavored pure water drinks manufactured and sold in Abu Dhabi. The flavor is a blend of most important healthy ingredients comprising high vitamins and low sodium contents. The healthy ingredients offer competitive advantage to the product. The brand has remained to be among the favorites currently being distributed in the market. The blend of the ingredients produces the best flavor both in terms of content and in terms of quality. Besides, the product will be distributed in sizes and branded containers that reflect shapes considered by customers as of superior quality. The sizes will also mirror the expected prices of the target market segment. Further, the high quality of the new product replicates the firm’s philosophy of choosing the product lines that ensures reliable and superior quality, competitive prices and fulfillment to clientele.
Market analysis
Target market
The main target market for Eden drink will be people with water retention problems and high blood pressure. Consumption of mineral water experiences increasing trends within the target market. In addition, the consumption of pure water particularly healthy pure mineral water for refreshment also increases among the youth as well as the middle age customers. The firm will take advantage of these inclinations to increase its market share. According to the survey, the target market for Eden drink will mainly consist of Abu Dhabi residents of between twenty-one and thirty years as well as those between thirty-one and forty years. Generally, the product will target the younger generation and the middle ages customers particularly women. In other words, the market will consist of individuals who are young, outgoing and full of life.
In addition, Eden Land will utilize premium tactics to appeal to specific consumer division thereby augmenting the volume of sales. The market survey indicate that male consumers represent approximately over twelve percent of Eden drink consumers while females accounts for the remaining proportion. Most importantly, the young populace between the ages of twenty-one to thirty years forms the bulk of Eden Land market since the age bracket accounts for over sixty-two percent of entire product consumers. Besides, individuals between the ages of thirty-one to forty years account for approximately over eighteen percent. Moreover, individuals of over forty years consume estimated over twelve percent.
Young women populace especially between the ages of twenty-one to thirty years will also be major market target for Eden Land due to their elastic reactions to marketing. Additionally, Eden Land will target health conscious customers since the individuals conscious of their health consume at least twice pure and healthy water (Kotler and Armstrong 345). Specifically, health conscious customers consuming plain water account for approximately over sixty-eight percent.
Market segmentation
Eden Land targets various potential consumers and purchasers who recognize the worth of Eden healthy and flavored pure water drink. Actually, Eden pure and healthy water market will be aggregated according to potential purchasers exhibiting similar requirements and responding in the same way to the marketing actions (Solomon 78). For the purpose of segmentation analysis, the firm will emphasize on the customer demographics, consumer insights, psychographics, market trends and growths.
Customer demographics
Regarding the consumer demographics, Eden Land focuses on market division according to age and gender. Depending on age, the firm’s Eden healthy water targets individuals of ages between twenty-one and forty years. Specifically, the firm will target individuals within the ages of twenty-one and thirty years that account for over sixty-two percent of the entire populace.
Considering the consumers’ sexual categories, Eden Land will emphasize on females between the ages of twenty-one to forty years. The firm will also focus on males of similar age bracket though the male age bracket accounts for only approximately over twelve percent. on the other hand the female counterpart accounts for over eighty-seven percent. Nevertheless, the firm will vary demographic segmentation depending on the target consumers.
Behavioral aspects
In terms of behavioral aspects, consumers’ willingness to purchase premium for high quality tastier Eden drink as well as the consumers’ concern for health and value attributes will be taken into consideration (Cole 253). Moreover, other reasons such as the reasons for drinking water and the consumer preferences will be taken into consideration.
Psychographics
Eden Land will also segment its market based on inquiries of customers regarding the products recipe, marketing communications and channels of distribution as well as consumers’ preferences, lifestyles and emotional attachments to the firm’s brand. In addition, the firm will concentrate on the social impacts of the customers on consumption of the Eden Healthy drink.
Market needs
The segmentation of the market based on market needs will enable Eden Land to offer a variety of alternatives in terms of size and prices of Eden drink as well as enhance competitiveness in terms of quality. Further, this kind of market dissection benchmark will enable the firm to offer competitive prices for the product.
Market trends
The industry data indicates an increasing trend in the consumption of the products despite depressed disposable income and rising prices. In addition, the intake of pure water also increases among the households. In other words, pure water consumption has doubled among the Abu Dhabi’s household particularly among the young and middle aged. According to the market survey, consumption is highest among the younger generation (Burns 235). The increasing trend in the healthy water drinks consumption is significant for Eden Land since new product launched into the market will be sold.
Environmental analysis
PESTEL analysis
Political environment
Political aspects have been found to be predominant influencing factor in the management and operations of Eden Land store. Like any other industry or business, Eden Land store requires politically stable environment in order to achieve its goals. However, UAE particularly Abu Dhabi where the business is situated is enjoying both political and social stability. The store will thrive to expand since the country in which it operates enjoys political stability.
Economic environment
The recent economic boom in Abu Dhabi has resulted into many smaller businesses sprouting up due to increased demand of products and services. The disposable income has increased considerably and most businesses are transacted. Besides, spending on household products has increased tremendously. Therefore, the improved economic situations will greatly influence the growth and development of Eden Land.
Social environment
Many social issues affect the industry. However, Eden Land will align the product with the target market needs including age and culture. The most important social factor influencing the industry is culture. However, the products of the firm are aligned with the socio-cultural needs of customers. In Middle East for instance, the socio-cultural setting is such that women are major buyers of the pure water drinks. Moreover, alcoholic drinks are highly discouraged making majority to rely on other drinks for refreshment. Therefore, the firm is investing in areas where socio-cultural factors will promote the sales of the product.
Technological environment
Eden Land will incorporate online activities in its operations. As such, technology is integral for its success. However, the developed ICT infrastructures only support large businesses. As most of the operations rely on the availability and usability of information technology, the business will thrive to apply available technology to develop. In essence, technology forms an integral part of the firm. All aspects of the firm including sales, purchases, marketing, management, and operations depend on the development of technology. Therefore, Eden Land will invest in cost effective technology to ensure the product’s presence in the market is increased.
Legal environment
Legal factors are critical for the establishment and operations of the firm. The legal requirements of Abu Dhabi support the establishment and growth of businesses. As such, Eden Land will comply with the legal requirements in order to operate effectively. Essentially, the legal environment in Abu Dhabi is conducive and supports the growth and development of firms particularly businesses that adhere to the required regulations. Eden Land will take advantage of the supportive legal environment to establish and ensure the product reach the target customers.
SWOT analysis
Strengths
The product’s brand will forms its major strength. Eden drink will be a brand known to all particularly consumers concerned with health. In addition, the firm’s trademark will also provides additional competitive advantage. Consumers will perceive Eden Land brands as superior and original. The brand name will differentiate the product from other similar brands of pure and flavored drinking water. Moreover, the distribution channels will ensure the presence of the products to the target consumers. Further, the perceived value of the product wills made it more appealing to the clientele (Keller and Kotler 202). Eden drink flavors will be preferred among consumers for its originality and contents. The branded product will be offered in diverse quantity and prices ranging from the up-market finest to low-price value. The strategy will be useful in covering diverse classes of clientele from low-income to high-end consumers.
Weaknesses
The economic depression currently experienced has an effect on the soaring expenses associated with livelihood and diminishing earnings in the hands of the consumers. As such, Eden Land is likely to experience reduction in the demand of the product due to reduced earnings. Further, in maintaining its status as a price leader in the soft drinks market, the firm will charge lower prices in all market segmentations, which in effect will squeeze its margins. The other weakness that Eden Land encounters arises from the fact that numerous emerging brands of drinking water and offer stiff competition.
Threats
The ever-emerging drinking water flavors and contents have greater effects on the client purchase tendencies. Eden Land has a responsibility of regular appraisal of the product to meet the expectations of the customers. Further, the probable slump in the consumption of the product due to increased competition is likely to initiate decreased proceeds. The outcome would divert the firm’s attention from high to low pricing strategies thereby restructuring the pricing system. Eden Land also faces the threat of competition from various similar brands from other firms that has been pursuing the motive of invading the market. In addition, the steady increase in the cost of production is a concern for Eden Land since it has an impact on the product’s price and revenue (Keller and Kotler 201).
Opportunities
Eden Land has the prospect of expanding into new markets through the application of various strategies. In other words, the firm has increased opportunities to expand in new markets where the product is not present. In addition, Eden Land has a prospect of developing its customer base through the application of its advanced technological prowess (Vernon 123). Further, there is a prospect of immense online business developments including catalogue purchases through the application of online facility enabling the firm to serve a large customer base. As a result, the firm will be able to achieve increased revenue margins.
Moreover, according to the industry trends, the increased consumption of pure water among the younger generation as well as middle and high-income households offers a greater opportunity for the firm to launch the new product in the market (Vernon 123). Besides, novel prospects for the launch of the firm’s new products are emerging in the young and middle-aged category of the market. In fact, the young and middle-aged is the highest in terms of demographic market segmentation.
Competitor analysis
Eden Land continues to experience stiff competition from various firms in the industry including Al Ain National Juice & Refreshments, Al Alwan Refreshment and Al Buhairah Lacnor. Currently, the Eden Land enjoys a market share of twelve percent, whereas Al Ain National Juice & Refreshments, Al Alwan Refreshment and Al Buhairah Lacnor have market shares of approximately twenty percent, twenty five percent and fifteen percent respectively.
Al Alwan Refreshment
Al Alwan Refreshment is the leader in the industry and controls approximately twenty percent of entire market share. In addition, Al Alwan Refreshment has become tantamount with quality pure and flavored water brands. In fact, Al Alwan Refreshment has over three hundred branches all over the UAE making its products be known by majority of the consumers. Further, the firm has distinct trademark as well as efficient delivery channels. Moreover, Al Alwan Refreshment product philosophy is centered on quality and consumer satisfaction thereby gaining competitive advantage over rivals.
Al Ain National Juice & Refreshments
Al Ain National Juice & Refreshments is the second largest in the industry with over twenty percent of the market share. The firm has diversified its operations in over 150 branches spread across UAE. The business brilliance of the firm’s management has led to its rapid expansion within the country. Further, low-pricing strategy of Al Ain National Juice & Refreshments has been vital in the attraction of consumers. The firm has also received various international quality accolades thereby amassing numerous consumers. Moreover, Al Ain National Juice & Refreshments has been experiencing an increasing trend in revenues leading to augmented levels of growth.
Al Buhairah Lacnor
The firm claims fifteen percent market share and rapid growth within three years. Al Buhairah Lacnor has experienced massive growth due to its aggressive promotion strategies as well as convergence of timing. Through the production of super-premium flavored drink products, the firm creates a better product that suits the consumers’ demands. Additionally, Al Buhairah Lacnor was the first to utilize flavor innovation in the manufacture of its products leading to attraction of large customer base. In fact, researches show that the Al Buhairah Lacnor brands goes down smoothly compared to brands of other companies making it preferable among various consumers.
Barriers to entry into the industry
Competitive rivalry
Increased competition is one of the major barriers to entry (McKeever 121). The purchasing patterns of consumers depend on products’ eminence, price, delivery period, market closeness and the firm’s repute. As such, the firm will have to look into the quality, prices and delivery times of products to attract numerous buyers. Moreover, the firm will consider locating its operations near the market to capture more buyers.
Increased cost of establishment
The expenses incurred in the establishment of plants are expensive and industry-specific. As such, the firm will incur the additional costs in sustaining trademark devotion as well as establishing plants (McKeever 121). Most importantly, the business will consider its delivery chains, localities, and trademark as well as the financial capital to gain the advantage of warding off potential competitors.
The reactions of firms to the barriers of entry
The industry is highly competitive with players offering diverse similar products. As such, most firms consider employing convenience and low-price strategies to counter substitute threats. Moreover, firms exploit technological advancements as well as financial strengths to increase competitive edge (Kraten 99). In addition, firms consider using various advanced flavors to produce high quality products.
Marketing plan
Price penetration strategies
The pricing strategy of the store will be market penetration to attract many customers to buy the product within a short time. In addition, the price penetration strategy will also help the store to introduce the product in the market. Factors that will influence pricing decisions is the customer’s expectation since they already have increased anticipation from competing companies in order to receive high level of services and products. In other words, Eden Land will utilize high-quality low-prices strategy to penetrate already highly competitive market.
As indicated, Eden Land faces stiff competition from various firms producing similar products within Abu Dhabi and its surroundings. Therefore, low pricing differentiation strategy will provide critical competitive advantage. Apart from high expectations the clients have on the product, Eden Land should also have the right price for the product to encourage the purchase so that the business can realize increased profits (Cole 201). In essence, price is a critical element in the market penetration strategy since it will primarily be used to attract customers and create sales revenue.
As expected, the quality and value addition attract high prices. However, the prices of Eden drink will be middle-high targeting high-end customers, low as well as middle-incomers. The high-quality low-prices strategy will be applied particularly to penetrate the competitive market (Solomon 122). In addition, the pricing strategy will be aimed at widening the spectrum of customers Eden Land is targeting.
The promotion and advertising strategies
Eden Land will be most active in its promotional undertakings. The aim of the promotional strategy is to enable the business brands become recognizable logo. In the promotional strategy, Eden Land will utilize various basic techniques to reach the customers. The promotion techniques the business will be utilizing include advertising, public relations, personal selling and sales promotions (Pinson 207). However, Eden Land will majorly utilize innovative advertising to attract and inform the viable clients about the products offered both in mass and digital media. Eden Land will be investing in both mainstream and social media advertising to increase awareness of the products to many customers. Besides, the brand awareness will also be improved through innovative advertising in mass media particularly in television (Lee 314). The major objective of advertising is to increase brand awareness of the Eden drink offered by the firm to target users.
Besides, Eden Land will utilize corporate social responsibility to appeal to many people as a method of maintaining its public relations. The success of Eden Land on public relations will improve its goodwill and attracts the public attention (Bradley 201). Further, Eden Land will provide special offers as a good way to stimulate and retain its customer’s loyalty. Moreover, the business will also extensively apply personal selling. Eden Land sales representatives will be fully trained on the business’s product information and will be responsible for the provision of excellent customer services.
Location and layout
Business location
Eden Land store will be located in cornice – Abu Dhabi because of nearness to the market. Most of the people who are aware of their health are exercising there and they need the Eden healthy drink. The location will be idyllic and perfect since it will provide easy access to the customers.
Business layout
The store has four departments including sales, store operations, finance, and purchasing, which will be operating under the CEO. The managers will be responsible in staffing, planning and controlling everything in their own departments. The store will design a supply chain network to facilitate efficient provision of Eden drink to the target audience by opening branches near the targeted customers and use mobile vehicle to supply the product. The Echo friendly bottles/cups will be imported at reduced costs. The management layout is indicated in (Appendix 8).
Management team
The management team of Eden Land will consists of both experienced and skilled workforce. The skilled and experienced workers will mainly be employed in management and supervisory positions. However, at the lower levels, unskilled temporary labor force will be required (Stutely 111). Eden Land will majorly depend on the vast experience and technical skills of its top management. The Chief Executive Officer (CEO) and other four managers have over thirty years experience in almost all aspects of pure water and flavored drink manufacturing, bottling and distribution processes as well as business enterprise development and operations.
The growth and development of Eden Land will depend on the Chief Executive Officer (CEO) expansive experience in manufacturing process, bottling procedures and distribution of pure water and flavored drink products as well as business enterprise development and growth. Besides, the CEO has been involved in the start-up, development and growth of other soft drink manufacturing companies. Besides, the success of Eden Land will rely on the technical skills of Shaikha, the stores operations manager. Shaikha holds a degree in management with over twenty years experience in pure water and flavored drinks manufacturing industry. Further, the stores operations manager has been involved in the management and operations, design, sales and distribution of diverse pure water and flavored drinks products around the globe.
Eden Land will also benefit from the expertise and experience of the Sales manager. The sales manager is expected to bring vast experience and technical skills in the development and growth of Eden Land. The firm’s financial capabilities will depend entirely on the experience and technical skills of the financial manager. The financial manager is an experienced banker and financial investments consultant. In addition, the financial manager has also served as board member in various institutions both in public and in private sector. Moreover, the financial manager has successfully raised funds for various organizations including over forty firms in both private and public domain. The expectations are that the financial manager will help the organization raise funds for the start-up and operations.
Besides the contribution of the management team, the board of directors will also manage the firm. Apart from overseeing daily management and operations of the firm, the board will be implementing corporate business models, licensing intellectual property to various firms including joint ventures, managing, designing and constructing manufacturing facilities as well as continuous technical and business support. Eden Land will also depend on the junior personnel drawn from various fields and capabilities. The expectations of the firm are that the junior personnel will be increased with time.
Financial Plan
Eden Land will require over 5 million AED as start-up capital comprising of total assets and expenses. The start-up expenses will include costs incurred during the facility preparation on on-site construction services, legal services and accounting, special consulting as well as contingency plans. The largest start-up in terms of finance is required for the building of manufacturing facility. Once completed, the facility will be one of the long-term assets. Besides buildings, machinery and fixtures, inventory as well as cash are categorized as assets. All the financial forecasts beginning with start-up capital are shown in the appendix.
Loans and other investments proposal
The store will pursue a loan of over 300,000 AED from a local bank. In addition, it will present a cash flow forecast, an opening balance sheet for the first month and a closing balance sheet ending for first year to the bank. Eden Land will also present its income statement forecasting for the first year and owner equity to the lender. The financial statement will help the bank to see how the store has planned its future cash requirements in avoiding the liquidity.
Works Cited
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Appendices
Appendix 1: Start-up Funding ( AED 000)
Appendix 2: Market Analysis
Appendix 3: Income statement (AED 000)
Appendix 4: Cash Flow Statement (AED 000)
Appendix 5: Balance Sheet (AED 000)
Appendix 6: Break-Even Analysis
Appendix 7: Marketing plan Budget
Appendix 8: Management Layout
